Spotify has reported another record profit quarter, one year after it implemented its first price increase for Premium plans.
The Swedish audio streaming service posted an operating income of 266 million euros ($289 million) in the second quarter, recovering from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, stating, “It’s an exciting time at Spotify. We keep on innovating and showing that we aren’t just a great product, but increasingly also a great business. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for its Premium services in the U.S. Starting this month, individual plan users will pay $12, an increase of $1; Duo plan users will see their costs rise by $2 to $17; and Family plan users will pay $20, up by $3. Last July marked the first price hike in 13 years, which averaged $1.
Notably, despite the increased subscription rates, Spotify gained seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify enjoys a reputation for having users who are less likely to cancel their subscriptions compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company has faced challenges in the past, with Spotify’s stock losing over two-thirds of its value in 2022 amid several quarters of operating losses. In January 2023, the company announced layoffs of 600 employees, which was followed by a further reduction of 1,500 jobs, equating to roughly 17% of its workforce.